Cost control, quality and doctor compensation

“It may be that we physicians are paid enough, or at least nearly so. But there is no objective way to calculate reasonable compensation for physicians.” So writes Dr. James Burdick, professor of surgery at Johns Hopkins University School of Medicine, in a recent article in the Baltimore Sun. The article is entitled “End of ‘doc fix’ charade and target what’s driving up medical costs.”

What Burdick is writing about is the annual doctor fix by Congress to escape a cut in Medicare reimbursement to providers. Our legislators in their “wisdom” enacted a law called the Sustainable Growth Rate some time ago. It has nothing to do with Obamacare.

So far, it has required a 27 percent cut in Medicare reimbursement for providers. Of course that would mean even fewer doctors caring for Medicare patients, so, Congress has had to override the law every year. As is so typical, our elected officials haven’t the “foggiest” idea re: Cost control in our broken Medicare provider payment system.

But this is not why I wrote about Burdick’s article. It’s his discussion of doctors’ reimbursement and potential misuse of diagnostic and treatment technology and other services.

He writes, “Doctors’ reimbursements, on average, have been decreasing slightly relative to the cost of living, with the mid-level annual income in 2011 of $203,000 for primary care doctors (although up to twice that for specialty doctors before malpractice premiums).”

My doctor friends would take issue with his word “slightly” although I point out many specialities would be much higher than primary doctors, some four to five times higher. But on the other hand, earnings for health care business executives is even higher.

And that is part of the cost problem. Why do certain administrators of large medical institutions and CEO’s of pharmaceutical and medical technology firms make significantly more in salary and bonuses? The same question can be asked why a university assistant football coach makes so much more than a professor of physics or accounting. These people work in large institutions with large budgets. The cost factors don’t really bother them that much; they don’t personally care as long as the profits are great. But doctors in private practice, big or small, worry about it every day — ever increasing costs of staff, insurance, taxes, supplies, etc.

Surveys indicate that most patients have no idea what primary doctors or specialists earn annually. The surveys further show they believe their physicians are rich, but that the doctors truly deserve what they earn. Consequently nobody wants doctors’ reimbursement cut because they fear it will affect quality and quantity of medical care. Congress is perfectly aware of patients’ concerns; after all patients are voters.

I don’t know what is enough physician compensation. It is a very individual and personal thing. Burdick writes, “After all, what doctors do — preserving health and saving lives — is, in a sense, priceless.”

I wish all doctors were “priceless.” Most are, but many are not. I’ve been blessed over the years, to work with and be friends of, very dedicated physicians, sometimes to the detriment of their family life. But in all cases, these men and women loved what they did and believe me, they lived in nice homes, had nice cars, went to nice places and sent their children to nice schools.

But today there are lots of money problems everywhere in health care. Burdick writes, “In the presently adversarial fee-for-service system, doctors feel justified in their efforts to get whatever they can from both government programs and private insurance…It is partly a response to the finding that in regions with more doctors and hospitals, more medical services are billed with no evident health benefit….some physician business, including outpatient tests and procedures are subject to costly and risky overuse.”

To understand cost control, quality and doctor income, you have to really understand the business of health care. Most doctors don’t, most patients don’t and certainly most of our federal and state legislators don’t!

Burdick says it best, “With the Affordable Care Act’s emphasis on clinical quality, doctors in the American Medical Association, American College of Surgeons, the American Board of Internal Medicine and other medical associations have begun to show that realistic cost control can be provided by improving clinical decisions. Through providing the right care, doctors can have reliable, relatively realistic incomes.”

Amen! In order to truly begin real health care financial reform, leaders in the field (and I mean physician and hospital representation) must seek the solutions. These solutions are out there right now. Forget help from government, insurance companies and so-called “think tank” fellows. They will never get it accomplished and voters need to understand that. Many of these experts are seeking more “corporate” medicine where doctors receive reimbursement from large hospital operations that are profit driven. Concierge medicine developed by consultants owned by huge “soap companies” certainly is no long term answer. Burdick is on the right track.

Columnist Mike Silver lives in Pinecrest and may be reached by email at michaelsilver@hargray.com or by calling 843-815-3894.